Determining whether discretionary grants should be allocated to particular services can be very difficult and confusing. However, some of the general guidelines are:
When deciding whether funding for a particular service should be taken from the discretionary grant, the primary consideration should be to ensure that the funding is needed.
In cases where there is an opportunity to use discretionary grants for the service, it is the policy of the Minister of Finance to ensure that they are used.
Example of discretionary grants: In January, 2016, the Minister of Finance decided to grant $40 million to the provincial health and education ministries for “the expansion and construction of primary health centres”. The Minister did not allocate these discretionary grants towards specific health or education programs, and the health and education ministries were charged $6 million in operating expenses and $6 million more in capital costs for this project.
The Minister of Finance’s decision was based in part on the recommendation that these funds be used for the expansion and construction of primary centres rather than direct health benefits or investments in education, particularly due to their size and location. The $40 million represented the minimum amount that would require an annual increase in funding — the maximum allowable discretionary grant for this program is currently $40 million. The Minister of Finance had to follow the decision that he made, as it was not clear which health agency would be required to provide the required services during the project.
However, this example does not reflect the broad range of discretionary grants that may occur with the use of discretionary grants. For example, consider a government funding decision to spend $500 million over three years on programs for the development by Indigenous communities of a new health policy. Many of the decisions will be made by a minister within the executive branch who will need to consult with ministers across the Government. While it may be possible for any of these ministers to access the grant, it would be unlikely that every decision made by a minister would be available.
Is the minister responsible for the funding?
The Minister of Finance must comply with the federal government’s funding criteria in deciding whether to allocate to a budget sub-program — this is called their “sub-program management” obligation. The Federal Court has identified several ways the Minister of Finance can breach this obligation. A ministerial directive, or directive from an executive branch department or agency, is one example.
When the Minister directs a government department to develop a sub-program to deliver, there is a legal requirement that the minister must notify that department of the sub-
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